Your Retirement Savings in Your 70s—How Do You Compare?

You’ve spent decades building your retirement savings. Now comes the part where you make it last. In your 70s, the questions change. It’s no longer about how much you can save—it’s about how much you can safely spend without running out of money.

The average American in their 70s has $250,000 saved, but half have less than $107,000. Whether you’re above or below that line, the real question is the same: Is it enough? The answer depends on more than just your account balance. It’s about coordinating what you’ve saved with Social Security, managing RMDs, and timing everything so your money outlasts you—not the other way around.

How Big Should My Nest Egg Be Now?

There’s no single “right” number for your nest egg. The right number is whatever leaves you with enough total resources—savings plus Social Security plus any pensions or other income and assets—to fund your lifestyle, plus whatever inheritance you hope to leave (unless you plan to “die with zero.”)

To figure out how big your retirement savings should be, multiply your estimated annual spending by 25. For example, if you spend $6,000 a month, or $72,000 per year, your nest egg should be $1.8 million.

How Do I Compare to Other Retirees My Age?

The average 401(k) balance among Americans in their 70s is $250,000. The median is $106,654. That means that half of retirees in their 70s have saved less than that, and half have saved more.

If you had saved the median balance and followed the classic 4% rule, that would mean you could safely withdraw only about $4,280 per year.

In addition, the average 70-year-old’s annual Social Security benefit is $26,120.

How Much Should You Withdraw from Retirement Savings?

Your focus should be on creating an income stream that lasts. Many experts suggest that in retirement, your assets and income should replace 75% to 85% of what your after-tax income was before you retired.

The classic “4% rule” for safe withdrawal rates is still widely used, but its creator, Bill Bengen, has since revised it to 4.7% (with annual inflation adjustments). Following this rule, someone with a $500,000 portfolio would start with $23,500 in the first year.

Prefer flexibility? The “guardrails” strategy adjusts withdrawals up or down based on market performance and supports higher starting rates (closer to about 5%) for many portfolios, while dialing back in down years to protect longevity.

Tax-Smart Withdrawal Sequencing

It’s important to have a plan for how, exactly, you’ll withdraw funds from your accounts. Fidelity has found that withdrawing proportionally from your taxable, tax-deferred, and Roth accounts (rather than emptying one “bucket” first) can smooth taxes and potentially extend your portfolio’s life.

A common strategy is to first “fill up your tax bracket” with traditional IRA/401(k) withdrawals, then meet any remaining income needs from taxable and Roth accounts. Drawing from Roth dollars (when qualified) avoids increasing adjusted gross income (AGI), and it may help you keep more of your Social Security untaxed.

Up to 85% of your Social Security benefits are taxable, based on your “provisional income” (your AGI plus your tax-exempt interest plus half of your Social Security benefits). Coordinating IRA withdrawals according to this formula can help reduce the portion of your benefits that are subject to tax.

If you built up Roth accounts while working, they serve as your pressure valve. When you have unexpected expenses—like a major home repair or medical bills—consider pulling from your Roth account. Otherwise, you might increase your AGI, which could potentially make more of your Social Security taxable.

Working in Your 70s Changes Things

Working in your 70s will affect your withdrawal strategy. If you contribute to your current employer’s 401(k), you can delay RMDs from that account until the year you retire. However, you must still take RMDs from your IRAs and your prior employers’ plans.

Working also changes your overall tax picture. Earned income plus RMDs plus Social Security can push you into higher brackets. But if you’re still working, you can continue making 401(k) or IRA contributions, using those contributions to offset some of your taxable income. And remember, an employer match, if offered, is essentially free money—it’s a good idea to snag it if you can.